Why It Seems Impossible To Buy Your First Home

Why It Seems Impossible To Buy Your First Home

A starter home is supposed to be an entry point into the market: a modest property, maybe a two-bed, one-bath, a place a young couple could buy into before all the pets and kids and seldom-used kitchen appliances come along.

Buy a starter home, if all goes well, and you position yourself later to trade up. A starter home helps make possible a second home, which makes possible maybe a third even grander one somewhere down the line.

But what happens when the most affordable entry-level housing on the market costs $700,000?

Okay, that's an extreme example (it's from metro San Francisco). But across the country, the list prices of starter homes have been rapidly rising, running away from what would be remotely possible on the kind of incomes that could traditionally buy you such properties. In metropolitan Oakland, the median list price for a starter home is up 104 percent since 2012, according to a Trulia analysis. In Denver, it's up 78 percent. In Portland, 50 percent. In metro Washington, 37 percent.

These prices are soaring, in part, because starter homes are some of the rarer creatures on the market now...